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Non-Tech : The ENRON Scandal -- Ignore unavailable to you. Want to Upgrade?

To: Mephisto who wrote (2865)	2/15/2002 7:12:54 PM
From: Mephisto	Respond to of 5185

"So when Paul A. Volcker Jr., the former chairman of the Federal Reserve, said last week, "Accounting and auditing in this country is in a state of crisis," he was not just speaking to men in green eyeshades, but to the millions of Americans who hope to pay for their retirement or their children's educations by investing in stocks. History suggests what could happen. After the 1929 crash, said Charles Geisst, a finance professor at Manhattan College and author of "Wall Street: A History," a series of Congressional hearings revealed that companies routinely failed to disclose important facts about their finances and that corporate insiders routinely profited at the expense of small investors. Many Americans simply stopped buying stock, Professor Geisst said. Not until the 1950's did ownership recover. Then, slowly, ownership increased, and today about half of all Americans own stock either directly or through mutual funds. In the wake of Enron, that trend may reverse, Professor Geisst said: "It wouldn't surprise me to see a flattening out of the number of households that are in the market." Until Enron's implosion, many investors, both individual and professional, ignored accounting issues. Wall Street's conventional wisdom held that while a few companies might be inflating their profits, the market as a whole was essentially honest." Above excerpt from: The Biggest Casualty of Enron's Collapse: Confidence The New York Times February 10, 2002 By ALEX BERENSON For story see: Message 17069524